July 2025 Employment Law Changes in Europe: What Businesses Everywhere Need to Know

The landscape for independent contractors in Europe is evolving rapidly. This July, several important legal changes are taking effect that will reshape how businesses engage with contractors.

For global organizations, especially those managing workforces in other countries, understanding these European employment law changes is essential to reduce compliance risk and protect your business. Here's a breakdown of the most significant European employment law changes in happening in July 2025 and beyond.

EU Platform Work Directive: Contractor misclassification crackdown

The EU Platform Work Directive, fully implemented across member states as of July 2025, represents a significant step toward combating worker misclassification in the platform economy.

Key updates for global employers

• Presumption of employment: Platform workers (defined as individuals who use online platforms to find work and provide services in exchange for payment) may be considered employees, not independent contractors, if the platform controls key aspects such as pay, fixed work schedules, or performance evaluation.

• Burden of proof on companies: Businesses must demonstrate that contractors operate with true independence to avoid employee obligations.

• Algorithmic transparency: Companies must disclose how automated systems affect work assignments, evaluations, and other critical decisions.

• Mandatory human oversight: Automated decisions (like account suspensions) require human review—no black-box automation allowed.

Action for employers

Review your platform-based workforce to ensure compliance ahead of national implementation deadlines (by December 2, 2026). Explore Safeguard Global’s Contractor Management solution to learn more about your compliance risk. Or, evaluate this risk on your own using Safeguard’s Worker Classification Tool to see if you might need some help.

Netherlands: New contractor classification law - Postponed to January 2026

The Netherlands has introduced the VBAR Law (Wet Verduidelijking Beoordeling Arbeidsrelaties en Rechtsvermoeden), creating stricter contractor classification rules.

What’s new

Originally scheduled for July 2025, the VBAR Law has been postponed to January 1, 2026 following industry feedback. In the meantime, the Dutch Tax Authority has resumed active enforcement under older rules (DBA), effective January 2025.

What businesses need to know

• Hourly rate threshold: contractors earning below €32.24 EUR per hour are presumed employees.
• Clarified criteria for independence: To maintain independent contractor status, individuals must demonstrate 1) multiple clients 2) autonomy over work methods 3) entrepreneurial risk
• Model contracts no longer provide upfront certainty: The actual working relationship is what matters now.
• Increased audits and enforcement: Authorities have ramped up oversight for potentially misclassified contractors.

Action for employers

Audit your contractor agreements in the Netherlands to ensure alignment with the new legal framework, now coming in January 2026. Make sure 1) hourly rates exceed the legal presumption threshold 2) Contractors exhibit clear signs of entrepreneurship 3) Working practices match contract language. Learn more about managing compliance with Safeguard Global’s Employer of Record services in the Netherlands.

Germany: Enhanced contractor and employee protections

Germany has implemented several measures to strengthen protections for contractors, impacting both employees and contractors.

What businesses need to know

• Minimum wage increase: The minimum wage is now set at €12.82 EUR per hour. Minimum wage is set to rise further to €13.90 in 2026 and €14.60 in 2027, in line with new coalition agreements.
• Mandatory electronic time recording: Employers must implement systems that digitally track employee working hours.
• Simplification via digital services: Digital parental leave applications are available via email, simplifying processes for workers.

Action for employers

Ensure minimum wage compliance for contractors and review contract delivery processes, including payroll and time-tracking systems in compliance with the new standards.

Learn more about managing payroll with Safeguard Global’s Employer of Record services in Germany.

United Kingdom: Contractor employment law reforms delayed

Proposed UK employment law reforms, including significant changes for contractors, have been delayed until at least autumn 2025.

Proposed reforms (still pending):

• Ban on zero-hour contracts (employment contracts that do not require the employer to provide a minimum number of working hours to the employee)
• Restrictions on "fire and rehire" practices
• Day-one protection from unfair dismissal
• Prohibition of NDAs in harassment/discrimination cases, unless confidentiality is requested by the victim

Action for employers

While these changes are pending, businesses and contractors should stay informed on the progress of the legislation. As these changes begin to take effect, let Safeguard Global stay ahead of evolving UK workforce laws for you when you leverage our Employer of Record services in the United Kingdom.

Italy: No immediate changes for contractors

In June 2025, Italy held referendums aimed at repealing certain labor laws and elements of the Jobs Act, including provisions related to contractor protections. However, none of the referendums reached the required voter turnout threshold, rendering the results invalid. As a result, existing labor laws, including those affecting contractors, remain unchanged.

See more information about Safeguard Global’s Employer of Record services in Italy.

Next steps

Take the following steps to ensure your business is fully compliant with local laws and regulations, and take into account the aforementioned European employment law changes happening in July 2025.

• Review contracts: Ensure that contractor agreements accurately reflect the nature of the working relationship and comply with new legal standards.
• Assess employment status: Evaluate whether contractors meet the criteria for independent status under the new laws, particularly concerning autonomy and economic dependence.
• Stay informed: Monitor ongoing legislative developments to anticipate and prepare for upcoming changes. Track upcoming laws and adjust HR practices proactively. Many of these rules have phased rollouts or further clarification pending.

The direction is clear: European lawmakers are cracking down on contractor misclassification and introducing stricter employment protections. For global organizations, ensuring workforce compliance is imperative so your organization does not face unnecessary fines or legal penalties.

For more information on these laws or to learn more about how we can help, reach out to Safeguard Global.

*This article was updated on 7/21/2025 to reflect the postponement of the VBAR Law in the Netherlands, and other updates in Belgium, UK, and Germany.